Political Institutions and Agricultural Protection: Theoretical Explanations and Empirical Evidence from TSCS-data

Abstract:

Inspired by the work of Persson and Tabellini this
projects analyses how formal and informal political institutions impact
on agricultural policy outcomes. At theoretical level a probabilistic
voter models is integrated with legislative bargaining models to analyze
how the interplay of formal constitutional rules, i.e. electoral rules
and the governmental system, with informal institutions, i.e.
legislative norms or interest group influence, determine agricultural
protection. In particular, a theory of agricultural protection in
parliamentary and presidential systems combined with majoritarian, mixed
or proportional representation systems will be developed. Moreover, a
theory of agricultural political decision-making in the EU-system will
be developed including specific informal legislative norms organizing
political exchange between national member states like the Luxembourg
compromise. Given the fact that existing political economy models fail
to explain observed large cross-country differences in agricultural
protection among industrialized or among developing countries,
respectively. Thus, one central target of the new developed theory is
certainly to provide an explanation for these observed variation in
protection. In the empirical part of the project we test our theory
using time-series cross-country data for about 75 countries. Our
econometric specification will account for several problems using
time-series cross-country data, i.e. serially correlation and unobserved
country heterogeneity. Additionally, it will be tested to what extend
advanced econometric techniques can be applied that allow the
identification of true causal effects of political institutions.